This paper uses the difference-in-differences method to analyze the impact of the merger of national and local taxes on the non-local investment of enterprises. The study found that the consolidation of national and local taxes can reduce the number of non-local subsidiaries. The mechanism analysis shows that regional tax administration and space for profit transfer are the related mechanisms. Further analysis shows that the merger of national and local taxes can effectively differentiate different types of enterprises, which increases the actual tax burden of non-local investment enterprises in the tax avoidance category, but has no significant impact on the tax burden of real non-local investment enterprises. The impact of the merger of national and local taxes is obviously heterogeneous, and its governance effect is more significant in the strong government intervention, poor legal environment and private enterprises in the regions where the non-local subsidiaries are located.